Campaign donors tied to Pa. treasury fees surface

Friday

Oct 31, 2008 at 4:51 PM

HARRISBURG (AP) — Two Philadelphia area businessmen whose clients help manage assets for the state Treasury Department, earning them millions, have ties to sizable contributions in the race for state treasurer and to groups that back the candidates.

MARC LEVY

HARRISBURG (AP) — Two Philadelphia area businessmen whose clients help manage assets for the state Treasury Department, earning them millions, have ties to sizable contributions in the race for state treasurer and to groups that back the candidates.

The businessmen's connection to some of the contributions has not been readily transparent because, under Pennsylvania law, business entities making donations to campaigns do not have to identify their owners.

Democrat Rob McCord and Republican Tom Ellis are seeking the office being vacated by Treasurer Robin Wiessmann, a job that includes the authority to award lucrative contracts to asset managers to invest billions in taxpayer dollars.

Businessmen Richard W. Ireland and Brian G. McElwee, partners in a company that markets the services of investment companies to the state and other public agencies, have contributed to political action committees that made substantial donations to both the McCord and Ellis campaigns.

Hotel ventures in which they are involved have also donated more than $30,000 to the Democratic candidate.

If elected, McCord sees no conflict of interest but plans to recuse himself from any decision involving a campaign contributor, his campaign spokesman said. Ellis said he sees no potential conflict arising from those particular donations, but said he thinks people who do business with the treasury should be limited to contributions of $250 to candidates for treasurer.

Ireland and McElwee are officers of VFIM Corp., a suburban Philadelphia firm with two clients that today manage more than a half-billion in state assets, down from more than $2.5 billion earlier this year. Since 2001 those firms have collected nearly $50 million in fees from the state, and shared with VFIM, according to the Treasury Department.

In their state campaign finance reports, candidates do not have to identify individuals who own business enterprises that make contributions, nor do they have to disclose ties between donors and state contracts. Similarly, business entities that register with the state do not have to identify all their owners.

But Ireland and McElwee are listed on corporate documents as officers of the general partners in two hotel ventures, KP Hotel Partners II and Omni Hotel at Independence Park, that donated to McCord. A third hotel venture that donated to the candidate lists no officers but gives the same King of Prussia address as that of a firm owned by the two businessmen.

Ireland and McElwee also contributed at least $95,000 combined in their own names to two political action committees that have made substantial donations to McCord and Ellis.

The two businessmen each gave $22,500 to the Pennsylvania Future Fund, a political action committee on whose board Ellis sits and which contributed more than $80,000 to his campaign.

Ellis said he has no personal relationship with either of the donors. He said he did not solicit their contributions to the PAC and did not dictate the PAC's decision to contribute to his campaign — though he did ask the committee for help to pay for radio ads.

"I don't see any conflict at all," said Ellis, adding that he raises more money for the fund from his law firm and fellow attorneys than he received from the committee.

Under state law, PACs are not required to disclose their board members, let alone identify the people who make their spending decisions.

Ireland, of Coatesville, did not return repeated telephone messages left by The Associated Press at his suburban Philadelphia office. Reached by telephone Tuesday, McElwee hung up on a reporter after saying, "We don't talk to reporters."

The two businessmen have given generously — more than $1 million combined — to Democratic and Republican groups, PACs and candidates in a number of states in the past decade, according to state and federal records.

McCord knows the men from the investment world and charity work and knew they were involved with the hotel ventures that donated to his campaign, spokesman Mark Nevins said.

If elected, the Democratic candidate does not believe his acceptance of the money would pose a conflict of interest but still would recuse himself from any decision involving a campaign contributor, Nevins said.

"If anyone contributed to Rob's campaign with the expectation of receiving special treatment, then they were sorely mistaken," he said.

Ireland and McElwee donated a combined $50,000 to the Keystone Future PAC. It gave $40,000 to McCord's campaign but the committee's chairman said that donation was unrelated to the money given by the two businessmen.

The PAC supports Democrats "who we believe are going to be current and future leaders of Pennsylvania and I think Rob fits that mold," said the chairman, Scott Caulfield, a Philadelphia attorney.

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